Replacing your HVAC system is one of the largest home investments you'll make. Here's what to expect, and which rebates still apply now that the federal credits have ended.
Average HVAC Replacement Costs
- Central air conditioner (AC only): $3,500–$7,500 installed
- Gas furnace: $2,500–$7,500 installed
- Air source heat pump (replaces AC + furnace): $5,000–$14,000 installed
- Ductless mini-split heat pump: $3,000–$8,000 per zone installed
- Geothermal heat pump: $15,000–$30,000 installed (the 30% federal credit ended after 2025)
Federal Tax Credits Have Ended
The heat pump credit (25C, up to $2,000) and the geothermal credit (25D, 30%) ended for systems installed after December 31, 2025. What remains are utility rebates, which vary by provider, and income-qualified Home Energy Rebates of up to $8,000 for a heat pump where your state's program is open.
What Drives HVAC Cost Variation
System size (tonnage): A 2-ton unit for a 1,000 sqft home vs. a 5-ton unit for 2,500 sqft. Oversizing is common and costly — always insist on a Manual J load calculation.
Efficiency rating: Higher SEER2/HSPF2 ratings cost more upfront but operate cheaper. At current electricity rates, a 20 SEER2 system vs. a 14 SEER2 saves $150–$300/year — often worth the premium.
Ductwork: Existing duct condition significantly affects cost. Sealing or replacing deteriorated ducts adds $500–$3,000 but dramatically improves efficiency.
Labor market: HVAC contractor availability and local wages vary significantly by region.
How to Avoid Overpaying
Get at least 3 written quotes with itemized breakdowns (equipment vs. labor vs. materials). Verify all contractors are NATE-certified and licensed. Ask each contractor to show you a Manual J calculation justifying the system size — any contractor who doesn't do one is guessing. HomeShark connects you with up to 4 vetted local HVAC contractors who provide competitive quotes at no cost to you.